Federal stimulus money for small Hawaii businesses

David Chang
David Chang
Karen Sakihama
Karen Sakihama

By Paul Drewes bio | email

HONOLULU (KHNL) - During this recession, there have been big bailouts to big banks and businesses.

But some of that stimulus money is also reaching small Hawaii companies. Which are finding credit relief, just when they need it the most.

The Stone and Cabinet Factory has only been around since last fall. So when the recession first hit, this granite company was caught between a rock and hard place. They needed capital to keep going.

"The first bank we went to for a loan declined us. They said you're a brand new business and with the credit squeeze we can't afford to give it to you," said David Chang, President of Stone & Cabinet Factory.

While some businesses downsized to deal with the faltering economy, this local company was busy trying to build up.

"As people started to remodel less and renovate less, we needed to expand out and diversify. So we would have more products to offer customers," said Chang.

In order to increase inventory, Chang turned to the Small Business Administration Hawaii. Which has been getting island companies connected with federal stimulus money.

"Its trying to loosen up credit and lending by banks. First by reducing the banks risk. Because of the financial crisis, credit pretty much dried up," said Karen Sakihama, the acting Director for the Small Business Administration Hawaii.

Under the Recovery Act, the federal government guarantees 90 percent of loans like Chang's, which cuts the risk for banks. Thousand of dollars worth of fees are also waived, saving this small business money when it needs it the most.

The stimulus money has allowed them to add more cabinets, sinks and other kitchen and bath products to their showroom. Smoothing out this rough patch of consumer spending while giving this granite business a solid chance at a brighter future.

"While people are down sizing, we're expanding. So we'll be ready for the recovery," said Chang.

As part of the federal stimulus money available, small businesses struggling with debt can also apply for interest free loans from the federal government. Those don't have to be repaid for 18 months.